State of California M E M O R A N D U M TO: PERSONNEL MANAGEMENT LIAISONS DATE: August 2, 1994 Reference Code: 94-43 THIS MEMORANDUM SHOULD BE DISTRIBUTED TO: Personnel Officers, Personnel Transactions Staff, and Long Term Disability (LTD) Insurance Program Coordinators FROM: Department of Personnel Administration SUBJECT: New LTD Insurance Carrier/Plan Enhancements LTD Open Enrollment NEW LTD INSURANCE CARRIER/PLAN ENHANCEMENTS The Department of Personnel Administration (DPA) is pleased to announce that effective October 1, 1994, the Travelers Insurance Company will be the carrier for the State's LTD insurance plan for nonrepresented employees. In an effort to provide a plan that more effectively addresses the needs of eligible employees, the State has enhanced the LTD plan to increase employees' protection from loss of income due to a lengthy illness or injury, while lowering the premium cost for many employees. The new plan will supplement a disabled employee's income to guarantee him/her a monthly benefit of 65% of his/her pre-disability salary, up to $6,000 per month. Other enhancements include:  a guaranteed minimum monthly payment of no less than 10% of your maximum benefit;  $100 extra per child for post-secondary education through age 21;  a survivor benefit of three times your monthly gross benefit for your survivors;  a 5% bonus for rehabilitation when you begin an approved rehabilitation program;  up to $250 per month in child care expenses for the first 24 months of benefit payment, provided you have begun rehabilitation;  no income offset during the first 24 months of rehabilitation, if total income replacement does not exceed 100% of your pre-disability salary;  a guaranteed stable premium through October 1999. NEW LTD PLAN AND RATE STRUCTURE The LTD plan structure, premium rate structure, and payroll deduction codes will also change effective October 1, 1994. The current four levels of benefits will be replaced with one level of 65% with no Cost of Living Adjustment (COLA). In addition, there will be two different sets of premiums based upon the employee's classification as a Miscellaneous Employee (contributes to OASDI/Social Security) or as a Peace Officer/Fire Fighter/Safety (does not contribute to OASDI/Social Security). The new payroll deduction codes and rate structure will be as follows: Age Factors/Premiums Effective October 1, 1994 Miscellaneous Employee Peace Officer/Fire Fighter/Safety 65% with no COLA 65% with no COLA Age Deduction Code: 075-111 Deduction Code: 075-112 Under 30 .0009 .0013 30-39 .0022 .0031 40-49 .0050 .0072 50-59 .0107 .0154 Over 60 .0145 .0207 The employee's monthly LTD premium is calculated by multiplying the monthly base salary by the appropriate age factor and adding an 80› administrative fee. LTD ENROLLMENT FORMS/BROCHURES Revised LTD enrollment forms and informational brochures will be available by mid- August. The enrollment form will be renumbered to GR-11513-9. Personnel offices should contact the DPA, Benefits Division, at (916) 324-0533/Calnet 454-0533, to order a supply of forms and brochures. CURRENT LTD INSURANCE ENROLLEES All employees currently enrolled as of the September 1994 pay period in the LTD insurance plan will be automatically rolled over to the Travelers' plan effective October 1, 1994. The first premium payment under the new plan will be deducted from the September paycheck. In addition, any time credited towards pre-existing condition requirements under the current plan will be automatically carried over to the new plan, subject to the continuity of coverage requirements. In mid-August, DPA will mail detailed information about the new plan to the home address of employees currently enrolled as of July 1, 1994. LTD OPEN ENROLLMENT An LTD open enrollment has been scheduled from September 1, 1994 through October 31, 1994. Eligible employees have been mailed a postcard notifying them of the new LTD plan and the open enrollment. A small supply of these postcards are attached for you to post on your bulletin boards. Eligible employees as of July 19, 1994 will be mailed an open enrollment package, including an enrollment form, to their home address in mid-August. Eligible employees are active nonrepresented employees appointed permanent, one-half time or greater, and designated Managerial (M), Supervisory (S), Confidential (C), or Excluded/Exempt (E88, E89, E97, E98, or E99). Employees who are on limited term appointments who otherwise meet the eligibility requirements may enroll only if they have a mandatory right of return to a position and status that also meet the eligibility criteria. Permanent Intermittents are not eligible. Eligible employees wishing to enroll during the open enrollment should complete Sections A and B of the enrollment form and submit it to their personnel office. The personnel office should verify the accuracy of Sections A and B, complete Section C, and forward the form to the State Controller's Office (SCO) for processing. The remarks box, item 9, Section C, does not need to be completed for open enrollment documents. Correctly completed enrollment forms received by the SCO by the tenth of the month will be effective the first of the following month, providing a premium was deducted from the employee's pay warrant. Furthermore, the employee must be on active status and at work on the effective date of coverage; otherwise, the effective date will be deferred until he/she returns to work. The first possible effective date is October 1, 1994, and the last possible effective date is December 1, 1994. Please note that personnel offices are still responsible for notifying employees who become newly eligible after July 19, 1994 about the voluntary LTD insurance benefit and providing them with a 60-day enrollment period. Newly eligible employees who do not enroll during their 60-day enrollment period must wait until the next open period to enroll. LTD ORIENTATIONS/TRAINING SESSIONS LTD orientations and training sessions for personnel office staff will be held in late August and early September. A schedule will be sent to personnel offices shortly. If you have any questions regarding this memo, please contact Terri Yee of my staff at (916) 324-0533/Calnet 454-0533. Patricia Pavone, Chief Benefits and Training Division Attachment